How to Manage Debt With a New Job

For many recent college graduates, managing debt while starting your first job can be tricky.

First jobs are not notorious for their outstanding salaries, and you may be living so close to the limit of your financial ability that one emergency purchase – such as a car breakdown or unexpected bill – can push you right over the edge.

In addition, most recent college graduates have taken on student loans, so you may be starting out your professional life already in debt. If you have a credit card from a bank or store, that can add to the bill.

But all is not bleak, and with some rudimentary money management skills, you can get a grip on debt even when you aren’t making a whole lot of money. Here are a few ways to get a handle on debt before debt gets the better of you.

Get a spending plan

First, take a look at your expenses and see where you are spending your money.

As your life changes, your expenses will change with it and there will be major and minor purchases associated with your new job. Sure, you need to trade in your sweatpants for a new work wardrobe, so you should make that expense part of your spending plan. But do you really need a new car now? If your old one is paid off, can you live with it for a while longer? Or is a certified used vehicle in your budget?

It may be tempting to open up new credit accounts or take on new loans now, but you might be better off putting that money toward your existing debt or even better, saving for the future.

Times really tough? Think about getting a forbearance

Speaking of existing debt, if you are in dire financial straits, it is possible to work out a forbearance plan for your student loan debts for six months to a year while you get on your feet.

Even if you have a job, most student loan lenders will work with you while you are experiencing economic hardship. However, it’s important to remember that, even with a forbearance, your loan balance is still earning interest that is being compounded yearly.

So if at all possible, make your payments and pay down that debt, because it can snowball out of control while you are not looking.

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